With the exception of that for lead, base metals prices on the Shanghai Futures Exchange were down at the close of the morning session on Tuesday February 25, with heightened risk aversion after a sell-off in global equity markets overnight pressuring the market.

A sharp increase in the number of reported cases of the novel coronavirus (2019-nCoV) cases in Japan, South Korea, Europe and numerous other countries in recent days drove a major fallout in global equities overnight.
In the United States, the Dow Jones Industrial Average fell by 1,031.61 points or 3.56% to 27,960.80, the S&P 500 was down by 111.86 points or 3.35% to 3,225.89, and the Nasdaq Composite Index dropped by 355.31 points or 3.71% to 9,221.28.
European equities were similarly down on Monday, with the Euro Stoxx 50 dropping by 152.40 or 4.01% to 3,647.98 and the Dax down by 544.09 or 4.01% to 13,035.24.
“Confirmed cases… now extend to some 30 countries, with the total approaching 80,000 and the worldwide death toll over 2,600. Italy reported more than 200 cases, with 7 deaths, while the number of deaths rose to 12 in Iran. Afghanistan, Bahrain and Kuwait reported their first cases,” Ray Attrill, head of foreign exchange strategy at National Australia Bank, said in a morning note.
“The head of the World Health Organisation still says the outbreak is not a global pandemic - defined by an uncontrollable geographical spread - but the increase in the number of cases in Italy, Iran and South Korea is ‘deeply concerning’,” Attrill added.
Besides the obvious human cost that the virus has had, market participants continue to weigh up the potential impact it could have on the global economy, which is resulting in broad risk-off sentiment this morning.
As a result, the SHFE base metals were largely down at the close of morning trading, led by a decline in zinc. The most-traded April zinc contract slid to 16,480 yuan ($2,343) per tonne, down by 115 yuan per tonne or 0.7% from Monday’s close.
Other losses were recorded in June nickel (-0.6%) at 102,430 yuan per tonne, April copper (-0.5%) at 45,790 yuan per tonne, June tin (-0.4%) at 136,550 yuan per tonne and April aluminium (-0.1%) at 13,515 yuan per tonne.
Lead was the sole metal to record a gain this morning, with a 0.2% increase in its April contract to 14,540 yuan per tonne.Other highlights

The dollar index, which gauges the strength of the US dollar against a basket of foreign currencies, was down by 0.11% at 99.22 as at 11.46am Shanghai time.

The Shanghai Composite Index was down by 2% at 2,970.63 as at 11.30 am Shanghai time.

In European data on Monday, the German Ifo business climate index for the February was better than expected at 96.1, topping expectations at 95 and improving from the previous level of 95.9.

Data of note on Tuesday includes Germany’s final gross domestic product and the US’ Conference Board consumer confidence and Richmond Manufacturing Index.

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